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Capitalist development
The existence of systematic barriers to economic and capitalist developments poses several challenges to social economic theorists. According to Biggart (2002), capitalist development can be defined as an economic system leading to capital accumulation through privatization of property.
In his work, Swedberg advocates a gradual privatization that involves feudal relations turning to capitalists in what he terms as ‘capitalism from below’. He argues that mass privatization, viz. capitalism from above, led to an incomplete and undesirable separation of producers from the means of subsistence.
This assertion meant that capitalism from above did not necessarily lead to accumulation of capital; on the contrary, in some cases, it ended up causing massive destruction and deindustrialization. In the recent past, economic theorists have been involved in heated debates on the concept of economic development.
In this analysis, The Readings in Social Economics by Nicole Biggart will be reviewed to examine the opinions presented about capitalist development. The second article is an excerpt from the Handbook of Economic Sociology by Swedberg. In part, these readings in social economics bring forth a healthy reaction to the Weber’s mature theory of capitalism among other social economic views that present general economic development ideas.
Biggart shows the extensive contribution of institutional factors, which Weber considered as necessary in developing his overall view on capitalism. On the other hand, Swedberg’s view about capitalist development is a mission geared towards accumulating capital as well as enhancing industrialization.
Swedberg indicates that socialism came up first to demonstrate that it had the capacity to provide defense to the public sector from privatization. However, the main idea in this paper is that Biggart’s view on capitalist development as being a rationalized way of human needs’ Swedberg through enterprise outweighs Swedberg’s argument on capitalism, which entails gradual privatization of property in parts rather than as whole.
During the time of transition to a capitalist economy, socialism had caused over industrialization due to the readily available labor force. The socialism strategy emerged to be a production of excess, which led to a drop when the world manufacturing systems suffered from excess production.
In a bid to emphasize on gradual privatization, Swedberg gives the case of China where the fall of socialism had no impact since the country’s agrarian sector, which was gradually transiting, remained dominant. The regimes that favored capitalism from above or radical transition to capitalist economies experienced deindustrialization and massive unemployment (Swedberg, 1994).
Swedberg’s opinion on capitalism development
Strengths
Swedberg’s ideology on capital development, which advocates transition from below, brings forth one of the best options to adjust quickly to the capitalist economy. For instance, its foundations are laid on agrarianism, which enhanced a move up in the capitalist economy from the periphery of the world systems.
Swedberg underscores the impact of capitalism from above, which seems to be moving towards the edges of the capitalist world systems. In a bid to affirm his opinion, he argues that countries whose communist parties maintained political supremacy strengthened the power of socialist ideology, thus ensuring defense against the privatization of the public sector.
As it gradually happened in China in 1994, the privatization agenda was under consideration (Swedberg, 1994). In a bid to avoid massive unemployment, capitalism from below offered privatization through fair auctions with consideration focused on domestic capitalists. On his part, Baggart does not transcribe to this notion, but he holds that massive change from above may be through revolution.
Weaknesses
Swedberg’s opinion is highly conservative and indifferent to some extent. The argument is conservative in the sense that he acknowledges the inevitable forces leading to capitalist development, but he insists on moving gradually. He talks of dismantling collective farms to allow private ownership by parts and later full time.
This idea blocks the giant multinationals by only giving chance to small and conservative investors. His view invites a market transitional debate with one side claiming gradual capitalism to benefit the direct producers whilst demeaning the role of redistributors.
He fails to make a firm stand on this debate, thus leaving the readers to make their own constructions. In addition, Swedberg emphasizes that gradual capitalism contributes to slow demand and supply of major investments, which is not true in all cases.
Biggart’s opinion on capitalism development
Strengths
Biggart’s view is substantially based on Max Weber’s work particularly the Protestant Ethic and the Spirit of Capitalism. Biggart elaborates that divergent ideas were key factors that fuelled transformation of the world systems’ economy especially in the Christian West.
Biggart’s idea emphasizes a rationalized system by arguing that the capitalist model determines its production capacity due to its simple methods and predictability. Biggart identifies some of the components that rationalize capitalism as analyzed in Weber’s work.
These components include private ownership of all means of production to ensure responsibility. In addition, decisions about their utilization can be calculated with optimum efficiency. Unlike in Swedberg’s idea about gradual transition, which involves less freedom of labor, rationalized capitalism allows free movement of labor in response to the state of demand.
Biggart elaborates the religious issues that led to the rise of economic ethics, which encouraged ties between the internal and external economies. Unlike capitalism from below, which discourages big investors and fast development, Biggart identifies how religious and social institutions eventually led to new economic systems. This aspect brings out the issue of capitalism in a sensible and ideal way rather than a set of conventional constructions about economic change.
Weaknesses
Biggart fails to capture and resolve the unrestricted competitiveness brought in by open markets. Biggart highlights the shortcomings of Swedberg’s idea and insists that capitalism does not need to rise from below, because in such a case, the need for revolution is inevitable towards capitalist transition.
For instance, the rise of capitalism in England involved revolutions of 1640 and 1688. Biggart sees capitalism as the most rationalized option because it brings freedom in markets. However, Biggart fails to acknowledge the importance of gradual capitalism, which undermines the role of small investors who are vulnerable to collapse during revolutions.
Biggart’s emphasis on religious legitimation in capitalism is exaggerated as the argument implies that in the absence of religious legitimation then capitalism will decline. Biggart focuses on the economy as being critical in the shaping of society as opposed to cultural and political factors. Biggart takes different standpoints about the issue of capitalist development by showing wavering opinions.
For instance, she views capitalism as a constructed system organized around the search of profit and individuals pursue personal interests. Biggart acknowledges that societies organized around the pursuit of individual goals are easy to dissolve (Biggart, 2002). Nevertheless, Biggart does not share Swedberg’s idea of gradual capitalism.
Conclusion
Biggart’s stand on capitalism is the most rationalized way of interaction in the world markets and it is well supported by showing the challenges and opportunities that exist in the system. On the other hand, Swedberg’s opinion encourages slow change, thus limiting growth.
Even though the two authors have different opinions about capitalism development, the future of capitalism depends on the regulations formulated to control the system and the criteria for making these regulations.
References
Readings in economic sociology by author Biggart.
The handbook of economic sociology by author Swedberg.
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